Fichas
Consumption
Fichas del conjunto (26)
- 1What is consumption?Spending on goods and services
- 2What is the biggest component of AD?Consumption
- 3What are factors that affect consumption? (8)Income
Wealth
Inflation
Intrest rates
Availability of credit
Expectations
Household demographics
Savings - 4What is the biggest factor in determining household consumption?Income
- 5How can the importance of income be measured?Marginal propensity to consume
- 6What does the Marginal propensity to consume measure?How likely people will spend some extra income rather than save it
- 7How is MPC measured?Change in Consumption/Change in income
E.g £200 rise in income leads to £150 rise in consumption 150/200 MPC=0.75 - 8What is the MPC likely to be in most economies?more than 0 but less than 1
- 9What is income a flow of?Money
- 10What is wealth?Static valuation
- 11What happens if household wealth goes up and why will this happen?Consumption will go up as people have more financial security
- 12What two things could household wealth be?Physical- house price goes up and can borrow more
Monetary- stock market increases , encourages households to sell investments - 13What decreases consumption?Rising inflation
- 14What does inflation tend to do and what does this lead to?Erode the value of monetary and physical wealth- households may save more
- 15When will households bring forward purchases?If they expect prices to rise in the future
- 16What happens to consumption if interest rates of up? Why does this happen?LGoes down and vice versa because it becomes more expensive to borrow money or less attractive to save money
- 17What are interest rates like in the UK at the moment?Low
- 18Is it easy or hard to borrow money in the UK, why is this? What has it led?Banks are still reluctant to spend, led to payday loan companies
- 19How will expectations change consumption?Expectations of inflation or rises in income will increase consumption
- 20What is the MPC for different age groups- young, middle and old?Young and old - high MPC
Middle aged- tend to have lower MPC - 21What is the MPS?How likely people are to save extra income rather than spend it
- 22What is the Housings Savings ratio?How much of disposable household income is likely to be saved
- 23What does the personal savings ratio measure?The actual saving of the personal sector as a ratio of total personal sector disposable income
- 24How do we measure the personal savings ratio?Actual personal saving / Personal disposal income
- 25What is the difference between the personal savings ratio and the household savings ratio?Personal includes partnerships charitable organisations i.e. independent schools
- 26What can the personal savings ration be used for?What lies ahead for AD
Indicator of what people will spend in the future
Información
- Descripción
- A-Level (AD) Economics Macrp Fichas sobre Consumption , creado por Maya Khangura el 17/02/2016.
- Creado por
- Maya Khangura
- Visitas
- 2
- Valoración